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[SMM Review] came out after a long call, still holding the pipa and half covering his face.
Jul 20,2020 18:35CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(20 July)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / critical count death / 835Unix / 2012Universe 154Univer 4653.

 

Zhang Wenhong: judging from the current experience of Beijing and Urumqi, the prevention and control measures we have taken at present, such as rapid response, precise prevention and control, and dynamic zero clearance, have been able to ensure that the local life will basically return to normal after four weeks. Based on China's strong prevention and control system, we should continue to live a normal life without slackening.

 

Overseas epidemic situation: new cases / confirmed cumulative cases / deaths / 24722 / > 14.5622 million / 6054329.

 

The Centers for Disease Control and Prevention says the virus epidemic in New York has nothing to do with China.

 

Us Empire priority: new / confirmed cumulative cases / deaths / 63995 > 3.8998 million / 14pr 3289.

 

Serious countries and regions:

1. Brazil: > 2.0998 million / 26106 gray 7pm 9533.

2. India: > 1.1187 million / 50203Universe 2gamma 7503.

3. Russia: > 771500 / 642 Compact 12342.

4. Mexico: > 344200 / 7615 Compact 3gamma 9184.

5. UK: > 294700 / 726 Universe 4pm 5300.

6. South Africa: > 364300 / 13285Comp5033.

7. Peru: > 353500 / 3963 Compact 12187.

8. Chile: > 330900 / 2307 Compact 8503.

9. Iran: > 273700 / 2182 Compact 14188.

10. Baccartan: > 265000 / 1580. 5599.

11. Saudi Arabia: > 250900 / 2504 Compact 2486.

13. Bangladesh: > 204500 / 2459amp 2618.

14. Columbia: > 197200 / 8560 Compact 6736.

15. Argentina: > 126700 / 3223Universe 2260.

 

< 2 > Today's current playback

1. Today, the spot market price of steel fell as a whole, with a drop of 0: 30 yuan / ton. Beijing Hegang fell 20 yuan / ton to 3700 yuan / ton, Shanghai Shagang fell 10 yuan / ton to 3570 yuan / ton, Huanghai fell 10 yuan / ton to 3510 yuan / ton, Hangzhou Shagang 20 yuan / ton to 3650 yuan / ton, Guangzhou cold steel fell 30 yuan / ton to 3870 yuan / ton, the rest of the region is stable.

Transaction status: poor.

Market mentality: low price mentality is unstable.

The steel billet in Tangshan area has dropped 30% to 3380 yuan / ton.

Raw material end:

On the 20th, the rise and fall of scrap across the country were mixed: the price increases were mainly concentrated in Hebei, Jiangsu, Liaoning and other places, with a mainstream increase of 10 million per ton, while the falling price areas were scattered in Anhui, Guangxi, Guangdong, Tianjin, Inner Mongolia, Hebei and other places, with a range of 1050 yuan per ton.

The price of coke is stable and weak, and some steel mills in Shanxi have started the third round of 50 yuan / ton reduction.

The price of main coking coal remains stable.

The spot price of iron ore port is generally weak and stable, and trading is OK. For details, see SMM Nonferrous Network: [daily Review of Iron Ore Market]

Today, the overall arrangement of Liantie Railway is weak, and the quotation in the port spot market in early trading is basically stable. Steel mills at the beginning of the week inquiry active, some merchants bargaining space opened slightly, the overall transaction is OK. The turnover of PB powder in Shandong area is 830mur835 yuan / ton, and that of PB powder in Tangshan area is about 835mur840 yuan / ton, which is 5 yuan lower than that of last Friday. And some businesses continue to be optimistic about the future, the price is relatively strong, there is little room for bargaining. From the perspective of transaction varieties, today's low-grade ore transaction performance is better, SMM tracking data show that Shandong port spot PB powder-super powder price difference continues to expand to a new high of 150Mi 160 yuan / ton, steel mills for low-grade ore demand increased. With the completion of inspection and repair of Australian ports in the middle and first ten days, iron ore shipments are still expected to pick up in the later period, but as the rainy weather in the south is coming to an end, the release of demand downstream of the terminal can still be expected, and iron ore prices may return to high range shocks after short-term adjustment.

2. Futures:

RB2010 main contract: rise between 3749 and 3698 within the day, closing at 3701.

HC2010 main contract: rise between 3782 and 3726 within the day, closing at 3737.

Iron ore i2009 main contract: weak shock between 829 and 811 within the day, tail 817.

Coke J2009 main contract: within the day between 1963 to 1931 strong shock, closing 1941.

Coking coal JM2009 main contract: within the day between 1203 to 1215.5 horizontal concussion, closing 1209.

 

< 3 > tomorrow's current forecast

1. Spot aspect: weak operation.

2. Futures:

RB2010 main contract: concussion between 3670 and 3750

HC2010 main contract: concussion between 3700 and 3780

I2009 main contract: concussion between 810 and 830.

J2009 main contract: concussion between 1900 and 1950

JM2009 main contract: concussion between 1200 and 1230

3. Spot operation advice: every sharp rebound in the right amount of inventory, a larger decline in the right amount of inventory.

4. Futures operation suggestion

Thread and hot coil: it is suitable for high throwing and low suction rolling operation in the range.

Iron ore: in the range, the bargain is still dominated by bargain, the holding is reduced by an appropriate amount near the upper value, and the superior item chooses the machine cloth for more than a month.

Coke: the proponent of the author's suggestion, it is appropriate to wait and see after leaving the court at the top of 1950. Activists can meet the high and short air in the right amount, fast in and out.

Coking coal: wait and see, chicken rib market.

RB2010 main contract: support level 3670, pressure level 3780.

HC2010 main contract: support 3700, pressure 3800.

I2009 main contract: support level 800, pressure level 830.

J2009 main contract: support 1900, pressure 1955.

JM2005 main contract: support level 1180, pressure level 1230.

 

< 4 > Information and heart words.

1. Consumption is the "ballast stone" for the stable operation of the economy. In the face of the impact of the new crown pneumonia epidemic and the external uncertainty brought about by the world economic recession, it is especially necessary to activate the domestic consumer market and inject more new impetus into the steady economic recovery. In the short term, we need to find ways to release pent-up consumption. In the first half of the year, catering revenue fell by 32.8% compared with the same period last year, and accommodation, film, tourism and other industries were deeply affected. In the long run, it is necessary to unleash the consumption potential by means of reform. It is necessary to take more measures to stabilize employment and increase income, so that the "purse" of the common people can be bulged and consumption can "run."

 

2. [guidance issued by the State Office to promote the renovation of Old Urban Residential areas] the General Office of the State Council recently issued the "guiding opinions on comprehensively promoting the Transformation of Old Urban Residential areas," requiring that in accordance with the decision-making arrangements of the CPC Central Committee and the State Council, we will comprehensively promote the transformation of old urban residential areas. The "opinion" stresses that great efforts should be made to transform and upgrade old urban residential areas, and 39000 old urban residential areas will be renovated in 2020, involving nearly 7 million households. The "opinion" clearly defines the task of transforming the old urban residential areas, focusing on the transformation of the old urban residential areas built before the end of 2000. The "opinion" calls for the establishment of a reasonable mechanism for sharing funds between the government, residents and social forces. [SMM Steel]

 

3. The production limit of environmental protection in Tangshan area is becoming stricter, and the billet rolling mill is closed independently to bear pressure on the local billet. The downward trend of billet has a certain negative impact on market sentiment, but the cost support is gradually coming out of the south, and the space for callback is limited.

At present, the intersection of strong expectation and weak realization: out of the plum, the demand is expected to be falsified! Weak reality in some areas of the south will still be plagued by rain and some areas of the negative impact of high social inventory, such as East China Hangzhou social inventory hovering at 1.1 million tons, there is no sustained rebound driving force, as long as the social inventory continues, the road to rebound is tamped, otherwise the space and sustainability are in doubt. In addition, the huge arbitrage in the early period is still intermittent, which will have a negative psychological impact on the market. In short, the view that there are many battles on the road to a rebound in July remains unchanged.

In view of the large probability of the relatively quiet period of macro factors in August and the weakening of strong futures expectations, the spot futures (three types of materials) have converged, the choice of futures direction needs to be guided by spot demand, and the short-term 3700 platform has a large probability of limited volatility.

Coke basic contradiction has not been highlighted, coke rebounded to this situation, more than a single intervention is unlikely to win. The author's point of view remains unchanged and is still optimistic in the medium term, and it is suggested that it is appropriate to wait for a sharp decline and then intervene.

The view of iron ore remains unchanged and continues to be bullish on late-stage prices. At present, in the relocation of the warehouse in the near and far months, it is the best choice to choose the far month of the machine cloth. The port inventory has exceeded 110 million tons this week, but it still needs to be filtered.

 

Attached weekly review

The author predicts that the logic will be strong next week, from the main road to simplicity:

First, supply-side output phased convergence continues to move, superimposed environmental protection production restrictions in Tangshan area become stricter again.

Second, the demand for building materials affected by the flood season is coming to an end, with plums coming out in most areas of the south; although the impact of the flood season is higher than expected, the demand is still very resilient.

Third, real estate housing construction is growing by 2.6%, and the growth rate of new construction has narrowed sharply by 7.6%, which is further supported by the demand for rush construction.

Fourth, the strengthening of cost support.

(1) the scrap resources are tight, and the price is easy to rise but difficult to fall.

(2) Iron ore prices are easy to rise but difficult to fall: the epidemic in Brazil has worsened, and Vale talks about its annual target of 3.1-330 million tons; weather factors affect Australian kangaroo shipments; strict environmental production restrictions at steel mills in Tangshan have nothing to do with iron ore demand. High domestic demand is fine.

(3) the fundamentals of coke are safe and sound, and Dou E is wronged in the second round of forced reduction of coke enterprises! The production capacity of Shanxi, Shandong, Hebei and Jiangsu can be lost, and the demand for coke in steel mills will be more expected in the later period.

Fifth, the inventory pressure of steel mills has been further alleviated, and there is no pressure to reduce prices.

Fifth, futures are strongly expected to be affected by the stock market, repair and return at that time …. No, no.

 

Market outlook for July: for details, see the monthly Review of June 25.

 

 

 

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